Commands

Reclaim disk space

Make sure Hyper-V is enabled (Apps & Feature).

Quit Docker Desktop and WSL (wsl --shutdown).

Locate the ext4.vhdx and run in a PowerShell:

Optimize-VHD -Path C:\Users\darko\AppData\Local\Packages\CanonicalGroupLimited.Ubuntu_79rhkp1fndgsc\LocalState\ext4.vhdx